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Generic Cliff

Posted by: Ken Phelps

Published on: March 23, 2009

At the recent Generic Pharmaceutical Association (GPhA) 2009 annual meeting, several presenters discussed what was termed the “generic cliff” – a time in the near future when there will be no small molecules left to copy. According to the CEOs of Watson, Mylan and Teva, this period is 2017-2019.

What’s leading people to see the ‘end’ of generic small molecules is that there has been very little innovation by big pharma the past few years. According to a slide presented by Doug Long of IMS, even some of the recent introductions have not have had much uptake in the marketplace.

Generic competition is so fierce that the big winners come from paragraph IV challenges. Yet, Wall Street’s Ronny Gal estimates that almost 90% of the paragraph IV’s have been challenged.

Biosimilars would seem to offer a spectacular opportunity – markets are discussed in billions of dollars – but due to their very high development cost and risk of approval very few generic companies can afford to tackle these products.

So, what’s a generic company going to do? CEO’s and presenters at the GPhA meeting had several names for the evolution, but the pathway they were talking about is 505(b)(2). Mylan and Watson are heavily investing in in-house clinical operations and field forces needed to promote these new products. Teva’s acquisition of Barr, among other objectives, expanded the sales force and 505(b)(2) product pipeline.

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